In its recently published decision dated June 11, 2014, the Spanish Supreme Court confirmed the ruling of the Valencia Court of Appeal that had dismissed the declaration of revocation of the trademark OROPESINAS.

Oropesa is the name of a Spanish village and “oropesinas” are pastries sold in that village by the trademark owner. The pastries, which were created by Mr. Francisco (the right holder of the priority trademark) in the 1980s, have been protected since 1999 by his mixed Spanish trademark OROPESINAS, for confectionery and pastry goods.

Pastries called “oropesinas” began to be sold commercially by the defendants, Mr. Eulogio and Agut Pan, S.L., in 2006. At the same time, they registered the mixed Spanish trademark LES OROPESINAS ARTESANALS DE ... J. AGUT for the same goods as those covered by Mr Francisco’s prior trademark.

Mr. Francisco filed suit based on the Spanish Trademark Act and the Spanish Unfair Competition Act. He argued, inter alia, that the defendants’ trademark registration should be declared invalid because it had been applied for in bad faith; that the defendants’ behavior constituted trademark infringement; and that the defendants took advantage of the reputation of his mark and therefore were guilty of unfair competition.

The defendants denied the cancellation, infringement and unfair competition claims. Further, they counterclaimed for the invalidity of the priority trademark on the ground that the term “oropesinas” referred to the geographical origin of the product. Alternatively, they argued that the priority trademark must be revoked, because the word “oropesinas,” over the years, had become the common name for the product protected by the trademark registration and, therefore, that trademark was no longer able to indicate the commercial origin of the product.

In its decision of October 21, 2011, the Commercial Court of Valencia held that the defendants’ trademark registration be cancelled and the prior trademark registration be revoked. It dismissed the other requests.

Both parties appealed against the first instance judgment on the same grounds. In its judgment of May 29, 2012, the Valencia Court of Appeal confirmed the cancellation declaration regarding the defendants’ trademark registration but recognized Mr. Francisco’s exclusive rights in the priority trademark and declared its registration to be in force. The defendants appealed to the Supreme Court.

The Supreme Court held that, in accordance with Article 12.2(a) of the EU Trademarks Directive (Directive 2008/95/EC) and Article 55.1.d) of the Spanish Trademark Act, for a revocation action against a trademark registration to succeed, it is necessary not only for the sign to have become the common name in the trade for a product or service in respect of which it is registered, but also for the right holder of that trademark to behave passively.

In this case, as soon as the right holder learned of the first attempts by the defendants to convert his priority trademark into a common term, he took the necessary measures to avoid a revocation action—specifically, by sending a letter to the defendants asking them to cease their behavior and filing the cancellation action against the defendants’ trademark registration.

The Supreme Court referenced the decision of the European Court of Justice (ECJ) in Levi Strauss & Co. v. Casucci SpA (Case C-145/05 (ECJ Apr. 27, 2006)) regarding the main aim of Article 12.2(a) of the Trademarks Directive: balancing the interests of the owner of a trademark against those of his competitors in the availability of signs. The Council, said the Court, “considered, in adopting this provision, that the loss of that mark’s distinctive character can be relied on against the proprietor thereof only where that loss is due to his action or inaction. Therefore, as long as this is not the case, and particularly when the loss of the distinctive character is linked to the activity of a third party using a sign which infringes the mark, the proprietor must continue to enjoy protection.”

The path followed by the Spanish Supreme Court highlights the importance of the behavior of the trademark right holder when faced with circumstances that could put the trademark’s validity at risk.

Although every effort has been made to verify the accuracy of items in the INTA Bulletin, readers are urged to check independently on matters of specific concern or interest.